Replies to post #28963 on Alto Ingredients Inc (ALTO)

[Dutch1]

Hi Mortenm,

Thanks for your reply. Since PEIX seems to react most to the oil price I thought it might be a good start to look at the oil inventories, production and price first. Those numbers are not to hard to find. I already got the inventories available for 52 weeks.

I wasn't able to find a good table yet for historical ethanol prices. And I think it's better to use numbers for this, instead of copy pasting a chart like I did previously.

And Corn I'm afraid that is is even harder for me to get the corn numbers all together. I'm a bit short in time to dig much deeper into this.

But anyway, I did look at the oil inventories, production and price. Combined it all in one chart. Scaled things up a bit to make it easier to compare the charts.

I think that the result shows that it is very hard to see a connection between the inventories/production and the price. I also added imports to see how that effects things

The connection you can see is that when the inventories move up, the production moves down. I think this shows how much they try to keep things in hand.

Also you see that in the first view months imports effected the inventories a bit more. And it seemed like they tried to lower the imports. That however didn't effect the price much.
Imports have been pretty level the past view months. But has slowly risen to the level of a year ago

You would expect to see the price to move down when the inventories move up, or up if the production moves down. Sometimes this happens, but mostly it doesn't.
The main reason IMO is that the oil price isn't only effected by what the US does. It has way more to do with what other oil producing countries do, or say they will do.

I tried to see if I could find anything about how macroeconomics effect the oil price, but from what I find. It is mostly the other way around. The oil price effects the macroeconomics.

To bring all this back to PEIX. To me it seems clearer now, that PEIX is depending for now on oil, and oil is depending on what other oil producing countries do. So for now PEIX is also.
However, in the end all comes down to the earnings. And it seems like Ethanol isn't just depending on oil, so it might be that PEIX is doing way better then reflected in the share price.